As of March 28th, Bank of Montreal (BMO) will not be renewing their lowest mortgage rates – their 5 year posted rate that they recently lowered to 2.99% a move that has drawn attention from Ottawa and in particular finance minister Jim Flaherty, as he encourages lenders not to engage in a full on price war over rates.
BMO had been seeking to make up market share from its rivals by heavily publicizing the posted rate cut from 3.09% to 2.99%. The posted mortgage rate is that at which a borrower must qualify against. Flaherty’s concerns stem from the ongoing risk that Canadians maybe taking on more debt than they can handle, and with a lower posted rate, more borrowers would be able to qualify for higher value mortgages.
Buyers can of course still secure mortgages with lower rates than 3.09%. Just last week our clients have been approved for 5 year fixed term mortgages at 2.89% and 2.99%. This is because lenders will often discount their rates from the posted rates.
BMO’s press release stated that they were ‘increasing’ their mortgage rates, which, in realty means they are just letting their promotional rate expire, and as a result the posted rates will jump back up to 3.09%.
To follow, Manulife Bank announced last week that they were also cutting their 5 year fixed rate to 2.89%, but after a call from Mr Flaherty’s office who deemed the move unacceptabl, they quickly changed their tune, and brought their rate back up only a day later.
The access to cheap money continues, but only if you can qualify. We have heard numerous stories over the past few weeks of offers on properties falling apart due to clients not being able to get approved financing. Don’t let this happen to you! All of our clients are pre approved with the top mortgage brokers in the city with the lowest mortgage rates.
Contact me anytime regarding this and how it affects you: Adam Chahl +1 778 385 6141.